easyjet Buys GB Airways (Merged)
So easyjet have bought GB.
Wow interesting times. I just hope you GB folks dont get put off by easy takeover. They are a great company to work for and one that really looks after its staff. I know i am looking forward to working with you GB guys.
Anyway here is the article about it all.
easyJet has today announced that it has agreed to acquire the entire share capital of GB Airways Ltd, excluding its slots at Heathrow Airport, from the Bland Group Limited for a cash consideration of £103.5 million.
GB is a Gatwick-based airline that currently operates as a British Airways franchise. It has 15 aircraft (six A321s and nine A320s) operating from Gatwick, Heathrow and Manchester. In total it operates 39 routes – 28 from Gatwick, six from Manchester and five from Heathrow – and carried up to three million passengers last year to destinations across southern Europe and north Africa.
Based upon its statutory accounts under UK GAAP for the year ended 31 March 2007, GB Airways reported profit before tax of £2.6 million and EBITDAR of £35 million on revenues of £250 million; had gross assets of £182 million and net assets of £33 million.
The acquisition of GB Airways is consistent with easyJet’s expansion strategy and, importantly, strengthens its customer offering at Gatwick, our biggest base which has a highly attractive catchment area in London and South East England. The purchase adds valuable take-off and landing slots at Gatwick and the opportunity to accelerate easyJet’s route development. Following the acquisition, easyJet will operate 24% of Gatwick’s slots and fly approximately eight million passengers across 62 routes from Gatwick.
By winter 2008/2009, GB Airways will be fully consolidated into the easyJet business model, releasing cost savings and ensuring that the acquisition will be positive to easyJet’s earnings per share and return on equity in easyJet’s current financial year, before one-off integration costs. easyJet anticipates GB Airways’ seat profitability reaching a similar level to its own at Gatwick in its first full financial year of operation.
Andy Harrison said:
“This is an acquisition which both strengthens our customer offering at London Gatwick, our biggest base with an attractive catchment area, and allows us to fully capitalise on the potential of the airport through a larger number of slots. The deal will bring major benefits to both easyJet and GB Airways customers, delivering a wider choice of destinations at easyJet’s great prices, and creating clear value for our shareholders. We expect the acquisition to be earnings positive in our current financial year and in the longer-term we will transition the GB Airways operation to easyJet’s cost base and operating margin levels. We expect to achieve both cost and revenue synergies as we expand our business at Gatwick.
From April 2008, we will have a substantial operation at Gatwick that includes 35 based aircraft, an extensive base management – in two terminals, 24% of available slots, approximately 1400 people, eight million passengers, 62 routes and a sizeable engineering function.”
easyJet will co-operate with British Airways to ensure a smooth and orderly transition for customers. To this end GB Airways will continue to operate all routes under the British Airways brand until 29 March 2008 after which flights will operate under the easyJet brand.
Kevin Hatton, Chief Executive of GB Airways, said:
“The sale agreement brings to an end a period of uncertainty about the future direction of our company. We are pleased that the business and customer base built up by GB Airways will now be secured and strengthened under the ownership of the UK’s largest airline, and one of the industry’s most powerful brands. We will fulfil our outstanding obligation as a franchise partner to British Airways and then look forward to a smooth operational merger with easyJet.”
GB Airways’ Heathrow slots will be sold under two separate exchange agreements the consideration for which will be passed on to the Bland Group on receipt. Completion is subject to the usual condition precedents, including approval from the Competition Commission. The transaction is expected to complete no later than 31 January 2008.